Pension Share

Pension share
 
There are special types of pension schemes that are available to both directors and individuals where your pension can own shares and you can decide which shares to buy and sell and monitor them on a daily basis.  Self Invested Personal Pension Plans (SIPP) - These are personal pension plans that are able to invest in a wider range of areas outside insurance policies.  They can invest in things such as shares, unit trusts, oeics, traded endowment policies, cash and commercial property, available to employees including directors (who are not members of an occupational pension scheme) and the self employed.

Small Self Administered Schemes (SSAS) - These are executive pension arrangements available to all employee's of a business although it is normal that only Directors and very senior employee's would use these as each member of the scheme has a say in how the whole scheme is run.  Much in the same as way as a SIPP they can invest in a wide range of investments such as shares, unit trusts, oeics, property and cash.  

These schemes can even lend your own company money for business purposes rather than you having to go to the bank.  A tax efficient way of investing in shares Within a pension fund the shares are allowed to grow FREE of Capital Gains Tax and if the scheme is established under a discretionary trust (which is normal) they are also FREE of Inheritance Tax.  They are not however free to reclaim the tax credit from the dividend income paid out (see Dividends & Taxation).
 
Tax relief on the contributions to purchase shares.  E.g.  If you are basic rate tax payer then you currently attract tax relief on pension contributions of 22%.  If you had £5,000 to invest in shares then you could either buy £5,000 of shares directly and have personal ownership or alternatively you could with tax relief buy shares with a pension fund of £6,410 (assuming a net contribution of £5,000 with tax relief at basic rate of 22%).  For more information visit our site Pensions Adviser.com and look specifically at SSAS Pensions for Directors pensions that can own shares or Self Invested Personal Pensions for Individuals that can hold shares.